No impact. China will use AI safely.

Beijing’s AI policy priorities are clear. The “Next Generation Artificial Intelligence Development Plan,” announced by China’s State Council in July 2017, called for China to catch up on AI technology and applications by 2020, and to become a global AI innovation hub by 2030. Chinese President Xi Jinping hammered the point home in his 19th Party Congress speech in October, when he mentioned the development of advanced manufacturing and the promotion of further integration of the Internet, big data and artificial intelligence with the real-world economy. Beijing has placed huge bets on AI for a host of political and economic reasons, from improving governance capacity to improving policy development and surveillance. The plan calls for China to lead the way in developing a regulatory environment to both encourage AI development and to mitigate the potential downsides of AI. A few months after the national plan’s announcement in July, the Ministry of Science and Technology (MOST) designated Baidu to lead the autonomous vehicle platform, Tencent for medical, Alibaba for Smart Cities, and iFlyTek for speech interfaces. These plans should be taken seriously, as the Chinese government has shown a strong track record in delivering results. For example, Beijing announced in 2010 that China would become the world’s leader in adopting high-speed rail (HSR). Today it has 60% of the world’s HSR market. In 2014, the Chinese government announced the “Mass Entrepreneurship and Innovation Plan.” Today there are business 8000 incubators in China, compared to 1400 in 2014. These plans have teeth, both due to the deadlines and metrics set out at the national level, as well as the local companies that are likely to take these directions as top priorities. We can expect a similar trajectory for China’s AI policies. Historically, the Chinese government has been open-minded towards technology development. When a new technology comes out, the government will give it the benefit of doubt and let it grow, rather than stifle it with policy or endless debates. Also, the environment in China is more conducive to fast launch and iteration. There is a general belief that it is better to launch something and then get it approved later. This allows Chinese businesses to generate real data at scale, which in turn allows technology to improve over a shorter period of time, particularly once AI is introduced into the equation. For example, while in the US, truckers’ unions are petitioning the Department of Transportation to delay autonomous truck testing, in China, the Xiong’an New Area, a planned smart city development southwest of Beijing, is being designed from the ground up with full autonomy in mind. Various highway authorities are willing to develop road augmentation, special lanes, or move warehouses near highway exits, all to facilitate faster deployment of autonomous trucks. We also see major initiatives in cities, following the central government’s call to action. Shanghai, Nanjing, Wuhan, and Tianjin are but a few of the cities coming out with their own AI initiatives. As with past policies, much of the resources will be applied at the provincial and city government levels. The types of resources may include subsidies for top talent (especially overseas talent); guidance for top VC funds, with the government playing the role of limited partner (LP) but offering some of its upside to the general partners (GPs) of the funds; special programs for top AI companies and start-ups (free rent, subsidy for local hiring, housing and private school for top talents); and technical awards for companies and individuals. Finally, the US, EU, and China will also compete to be out in front on developing a regulatory regime around AI technologies and applications. The National Plan’s explicit recognition of the need for regulatory, legal, and ethical principles for AI development and use represents an uncommonly foresighted approach. Of course, the government’s approach to AI regulation, ethics, and economic adjustment will reflect Beijing’s broader model of governance and ideology. Given its preference for a state-centric approach to international issues, for example, it is possible China will launch an initiative via the UN to establish first an automation/AI-related “code of conduct,” or basic regulatory approach, followed by a special committee on the topic and eventually an oversight body operating within a UN framework. Such an initiative would put China at the forefront of developing a global approach to these issues. Beijing has attempted a similar approach on cybersecurity issues, which it argues have a global impact and require a global regulatory response.